Warner Music's Cohen sells 23 percent of his stake

NEW YORK (Reuters) - Warner Music Group's top U.S. executive for recorded music, Lyor Cohen, sold 23 percent of his shares in the company earlier this week, according to a U.S. regulatory filing.

The move comes after Warner's shares have climbed nearly 80 percent from all-time lows in January, as long-held concern about the company's prospects in the beleaguered music industry appears to be abating.

Cohen, responsible for artists like Red Hot Chili Peppers and Green Day, sold 800,000 shares on Monday at $8.45 each for around $6.8 million, according to the filing with the U.S. Securities and Exchange Commission on Tuesday. He retains ownership of another 2.6 million shares.

One Wall Street analyst said the sale by Cohen, chairman and chief executive of Warner Recorded Music North America, contradicted management's contention that the company's shares were undervalued.

"While Warner Music Group's (organic) revenues continue to decline, we are quite surprised to see Mr. Cohen selling such a large block of stock at these levels," said Pali Research analyst Richard Greenfield, a long-time critic of the company's management.

In a statement, Cohen said his confidence in Warner's future prospects remained as strong as ever.

"This sale reflects nothing more than a normal need for liquid assets for personal expenses, as well as my financial adviser's recommendation that I diversify my portfolio for tax and estate planning," he said.

Cohen renewed his contract in March and extended his employment until March 2013. The agreement gave him an annual base salary of $3 million, with potential bonuses of up to $5 million.

The amended contract also granted Cohen 1.5 million stock options with an exercise price of $5.29 as well as 1.75 million performance-based restricted shares.

(Reporting by Yinka Adegoke; Editing by Lisa Von Ahn)